Here’s what Jonah Lehrer has to say about this event. I think it’s important in understanding human psychology.

What a sad day for American political discourse. It’s more than a little pathetic that the President of the United States had to release his own long form birth certificate just to prove what every serious person already knew. Once a rumor starts, it’s really hard to stop, especially when a quick Google search can rummage up evidence for nearly any belief.

And yet, it’s not entirely fair to blame Trump, Drudge or the information age for our persistent idiocy. Rather, the fault is really our own: The human mind is simply terrible at politics. Although we think we make political decisions based upon the facts, the reality is much more sordid. We are affiliation machines, editing the world to confirm our partisan ideologies.

Consider a recent study by the Public Policy Institute of California. They polled voters shortly after the most recent election, in December 2010. Quite rightly, the majority of Californians said they had little confidence in their fellow voters to make public-policy decisions at the ballot box. That, unfortunately, is where the wisdom ends. While most voters believed that other voters were uninformed, they expressed no such skepticism about their own knowledge.

That was a mistake. It turned out that only 22 percent of voters could identify the largest category of state spending (public schools) when presented with a list of four options. In other words, they performed below random chance. Voters performed even worse when it came to state revenues, with many identifying car registration fees as the leading source of funding. (In reality, those fees account for 2 percent of state revenue.) As the Institute concluded, “Californians’ views about the budget are not based on an understanding of where the money comes from and where it goes.”

"Ultimately, patterns of hypocrisy and hypercrisy perpetuate social inequality. The powerful impose rules and restraints on others while dis regarding these restraints for themselves, whereas the powerless collaborate in reproducing social inequality because they don’t feel the same entitlement."

Let’s call it the hypocrisy of arrogance. As Newt Gingrich said to his wife when caught cheating, ""It doesn’t matter what I do. People need to hear what I have to say. There’s no one else who can say what I can say. It doesn’t matter what I live." That’s about the most cynical display of self-delusion and arrogance I have ever heard. I have to marvel at the brazenness of the treachery Gingrich defends. Trump is cut from exactly the same cloth. It is telling that he is the (temporary) frontrunner to oppose the US President as America sinks further into banana republic status. And this is because Humans prefer cockiness to expertise. They would rather someone be consistent and wrong than inconsistent but right. That’s the basis of ideologies.

[M]y overarching comments to all this are:

The real problem in the U.S. has been government capitulation to large corporate interests in fields like healthcare, banking, real estate, defense, agriculture and oil and gas.

The elites in America in both government and large corporations feel a sense of entitlement that exempts them from the rules. I see the Charlie Rangel scandal this way for example.

The revolving door between government and large corporations reinforces this sense of entitlement by staffing elites in corporations and government with the same players.

The result is a tilting of the playing field toward elites who accumulate wealth. The U.S. seems headed toward a Latin American style income distribution with a wider dispersion of wealth.

There will be no substantive change to the financial system unless we get a full economic collapse. Financial interests are just too powerful now. Re-regulation has just meant greater power for regulators. None of the real systemic issues like too-big-to-fail are off the table.

But do these facts really matter? Consider this. Just recently, President Obama urged a repeal of oil and gas tax breaks, something House Speaker Boehner also has said is a step in the right direction. Subsidies are distortionary and should be eliminated. I say get rid of all subsidies and tax breaks – corporate and individual. But as soon as Obama made this appeal, the response from Boehner’s people was negative:

A Boehner spokesman, Brendan Buck, said Tuesday that Obama’s suggestions "would simply raise taxes and increase the price at the pump." Buck said that Boehner’s willingness to examine a subsidy did not mean he was advocating its repeal.

In January 2006 a group of scientists led by Westen announced at the annual Society for Personality and Social Psychology conference in Palm Springs, California the results of a study in which functional magnetic resonance imaging (fMRI) showed that self-described Democrats and Republicans responded to negative remarks about their political candidate of choice in systematically biased ways.

Specifically, when Republican test subjects were shown self-contradictory quotes by George W. Bush and when Democratic test subjects were shown self-contradictory quotes by John Kerry, both groups tended to explain away the apparent contradictions in a manner biased to favor their candidate of choice. Similarly, areas of the brain responsible for reasoning (presumably the prefrontal cortex) did not respond during these conclusions while areas of the brain controlling emotions (presumably the amygdala and/or cingulate gyrus) showed increased activity as compared to the subject’s responses to politically neutral statements associated with politically neutral people (such as Tom Hanks).

Subjects were then presented with information that exonerated their candidate of choice. When this occurred, areas of the brain involved in reward processing (presumably the orbitofrontal cortex and/orstriatum / nucleus accumbens) showed increased activity.

Dr. Westen said,

None of the circuits involved in conscious reasoning were particularly engaged… Essentially, it appears as if partisans twirl the cognitive kaleidoscope until they get the conclusions they want… Everyone… may reason to emotionally biased judgments when they have a vested interest in how to interpret ‘the facts.’

So, let’s be clear: Political partisans have a well-developed political world view. Facts won’t change that view. When confronted with data that did not fit their particular view, they experienced mental stress because this created cognitive dissonance. Rather than trying to resolve the conflict objectively, they looked for ways to mesh the new information with the pre-conceived view. When they successfully accomplished this feat, they were massively rewarded by the areas of the brain for pleasure. I talked about this before in my post On The Hypocrisy of Voters: The politics of economics redux which shows that:

People are hypocrites. People don’t have any defensible philosophical world view that they apply systematically. It depends on who is in power and whether one feels allied to power by party affiliation.

What about in investing and economics? Why should we expect things to be any different? Look at the credit crisis. How many leading economists or politicians are crying "Mea Culpa. I was wrong. I screwed up and now I need to repent?" You thought Alan Greenspan was until he started saying "Prove I Was Wrong." You add the psychology of economic forecasting to the hypocrisy of arrogance and the partisan nature of economics and you have a recipe for people digging in their heels, facts be damned. It doesn’t matter what the facts say.

I try to resist this – not always successfully I might add. But I do try. I am asking you to do the same. Don’t overcommit yourself to an investment, a stock, a position on deflation versus inflation, an economic paradigm. If you do, you will be the worse for it. You will be wrong and then you will be confronted with a decision on how to react. The insidious thing about this is that when we are wrong, we react automatically in defense without even thinking about it. And that’s where we get into trouble. Being wrong is humbling, humiliating, shaming – and shame is an emotion that is about as powerful as fear in driving motivations. But being wrong can be a good thing. I will leave you with a TED video by Kathryn Schulz on being wrong. I think it gets at what I’m trying to say.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

As cynical as it sounds, it does seem to be supported by the evidence. All too often we see that ideology leads us astray.The question then is why people try to persuade others about these big issues where many have strong held beliefs? I think it’s because enough people don’t have strong held beliefs, enough people have open minds and are looking for pragmatic solutions that there is always the chance that the facts WILL matter. That’s what we should hope at a minimum.

As cynical as it sounds, it does seem to be supported by the evidence. All too often we see that ideology leads us astray.The question then is why people try to persuade others about these big issues where many have strong held beliefs? I think it’s because enough people don’t have strong held beliefs, enough people have open minds and are looking for pragmatic solutions that there is always the chance that the facts WILL matter. That’s what we should hope at a minimum.

Anonymous says 8 years ago

The conspiratorial beliefs of the Birthers are further lubricated by two related effects:

Very easy to see why the current environment is very favourable for both phenomena.

Also, humans not only prefer cockiness to expertise. Cockiness is often perceived as expertise, thanks to our strong tendency to (mistakenly) associate charismatic narcissistic traits with traits of cleverness and creativity. This is why rational caveat-ridden conditionally-probabilistic scientific argumentation will never gain any traction in the modern media world.

All of which begs the question, how on earth did such a flawed species ever produce this energy-intensive advanced technological civilization? We seem to be little better than Skinner’s pigeons. My belief is that there is actually an evolutionary benefit for a socialised species adept at spreading irrational beliefs, as opposed to a purely rational thinking one. The environment that is favourable to the former is one in which there are many dangerous risks that can potentially yield huge societal rewards — risks like drilling for highly lucrative but dangerously toxic petroleum, or going into debt to pay for biotech R&D that may never yield anything of value. The purely rational species would tend to err on the side of self-preservation by avoiding reckless ventures, but missing out on any of the huge rewards. This would be all well and good if such a society were the only one on the planet, however in the real world many societies are competing. In such an environment, the risk averse society seldom ends up on top. Rather it is the society that is most efficient at convincing its own members that a reckless risk with a huge payoff is a good idea, that will most likely dominate. It is also true that such a society may also end up impoverishing itself if not destroy itself entirely. But ultimately natural selection is a numbers game, and only one reckless irrational ideologically driven society needs to get lucky to ensure that the required human traits will be passed on to the next generation. If this theory holds, then irrationality is an evolutionary response to randomness, a disturbing thought indeed.

I am sure people had similar angst during crises in the past: the 1860 and 1870s, 1914 or 1939. So I am comforted by the thought that, despite our foibles we got through it all. Here’s my question though. It’s true that a lot of what got us through millions of years of evolution brought us to this point today. But our environment is changing so much faster than our evolutionary ability to cope. I sense that the last 150 or 200 years has put humankind in a constant battle with its own worse self.

“The purely rational species would tend to err on the side of self-preservation by avoiding reckless ventures”. That to me brings up the Easter Island question, something I am always thinking about given the billions of years fossil fuels took to develop and the short period we have used much of them. What happens when we get to the point where dwindling resources become existential regarding our way of life. Can our recklessness produce the rewards?

fresnodan says 8 years ago

great comment – actually made me think and reconsider some of my opinons!
Really, if you think about it, isn’t it irrational, given all the evidence, that humans are more than say 5 to 50% rational? Slavery, the final solution, the price of Apple stock.

Anonymous says 8 years ago

The conspiratorial beliefs of the Birthers are further lubricated by two related effects:

Very easy to see why the current environment is very favourable for both phenomena.

Also, humans not only prefer cockiness to expertise. Cockiness is often perceived as expertise, thanks to our strong tendency to (mistakenly) associate charismatic narcissistic traits with traits of cleverness and creativity. This is why rational caveat-ridden conditionally-probabilistic scientific argumentation will never gain any traction in the modern media world.

All of which begs the question, how on earth did such a flawed species ever produce this energy-intensive advanced technological civilization? We seem to be little better than Skinner’s pigeons. My belief is that there is actually an evolutionary benefit for a socialised species adept at spreading irrational beliefs, as opposed to a purely rational thinking one. The environment that is favourable to the former is one in which there are many dangerous risks that can potentially yield huge societal rewards — risks like drilling for highly lucrative but dangerously toxic petroleum, or going into debt to pay for biotech R&D that may never yield anything of value. The purely rational species would tend to err on the side of self-preservation by avoiding reckless ventures, but missing out on any of the huge rewards. This would be all well and good if such a society were the only one on the planet, however in the real world many societies are competing. In such an environment, the risk averse society seldom ends up on top. Rather it is the society that is most efficient at convincing its own members that a reckless risk with a huge payoff is a good idea, that will most likely dominate. It is also true that such a society may also end up impoverishing itself if not destroy itself entirely. But ultimately natural selection is a numbers game, and only one reckless irrational ideologically driven society needs to get lucky to ensure that the required human traits will be passed on to the next generation. If this theory holds, then irrationality is an evolutionary response to randomness, a disturbing thought indeed.

I am sure people had similar angst during crises in the past: the 1860 and 1870s, 1914 or 1939. So I am comforted by the thought that, despite our foibles we got through it all. Here’s my question though. It’s true that a lot of what got us through millions of years of evolution brought us to this point today. But our environment is changing so much faster than our evolutionary ability to cope. I sense that the last 150 or 200 years has put humankind in a constant battle with its own worse self.

“The purely rational species would tend to err on the side of self-preservation by avoiding reckless ventures”. That to me brings up the Easter Island question, something I am always thinking about given the billions of years fossil fuels took to develop and the short period we have used much of them. What happens when we get to the point where dwindling resources become existential regarding our way of life. Can our recklessness produce the rewards?

Anonymous says 8 years ago

great comment – actually made me think and reconsider some of my opinons!
Really, if you think about it, isn’t it irrational, given all the evidence, that humans are more than say 5 to 50% rational? Slavery, the final solution, the price of Apple stock.